There has been deterioration in the finances of Andhra Pradesh over the last decade. The State is passing through a phase where the revenue generated is not sufficient to meet its expenditure. This creates scarcity of funds for investment in infrastructure. This paper studies the structure and trends in public finances of Andhra Pradesh from 1985-86 to 2004-05. The study period is divided into four phases viz., 1985-86 to 1989-90; 1990-91 to 1994-95; 1995-96 to1999-2000 and 2001-01 to 2004-05. Under each phase, the study examines the key indicators in four categories—deficit management, financing fiscal deficit, revenue and expenditure management, and debt management and dependence of funds on Center. The paper discusses the key policy initiatives and fiscal reforms made during the study period. It also discusses issues related to the State’s fiscal autonomy and fiscal dependence on the Central government.
